Goldman Sachs CEO: The U.S. Debt Poses a Threat to the Economy

Debt Alarm from Goldman Sachs CEO

Goldman Sachs Group Inc. CEO David Solomon stated that the increasing debt levels in the U.S. pose a serious risk of "paying a price" for the economy if the growth rate does not improve.

Risk of Growth Loss

During an interview with David Rubenstein at an event organized by the Washington Economic Club, Solomon warned, “If we continue on the current path and do not increase the growth rate, we will pay the price for it.” He emphasized that the likelihood of a recession in the near term is "low" and that the only way out is through “growth.”

Dependence on Stimulus Issues

Reiterating his concerns that the United States and other Western economies have become dependent on stimulus funded by debt, Solomon expressed that this situation has been exacerbated especially by the financial measures taken during the Covid-19 pandemic. He stated, “Fiscal stimuli and aggressive fiscal policies have become part of the functioning of these democratic economies,” indicating that this situation has significantly accelerated over the past five years.

Bankruptcies and Market Concerns

Solomon noted that he does not share the view that some bankruptcies in the U.S. have raised concerns of a "systemic" crisis in the debt market, during a FII forum held earlier this week in Riyadh, the capital of Saudi Arabia.